House construction is set to plunge to its lowest level for 90 years as councils have cut their home-building targets by more than 270,000 in the past two years, a report warns.

Moves to give English town halls more power over planning have backfired as the numbers of planned new houses are scaled back in areas worst affected by homelessness, according to the Policy Exchange think tank. The Coalition scrapped quotas set by the last government for building in each part of the country, devolving responsibility for the issue to local authorities.

Housebuilding targets have been slashed by 57,000 in the South-east and by 108,000 in the South-west since 2010.

The report???s author, Alex Morton, said: ???The Prime Minister and the Deputy Prime Minister have rightly made it clear that we need to build more homes. Yet the Government is on track to preside over the lowest level of house-building since the 1920s.???